Feds seek assets in TelexFree case

Friday

Aug 1, 2014 at 10:22 PMAug 1, 2014 at 10:53 PM

By Lisa Eckelbecker TELEGRAM & GAZETTE STAFF

WORCESTER — Prosecutors in the TelexFree Inc. case are going after dozens of bank accounts and properties, including several in Central Massachusetts, that they say are linked to the alleged pyramid scheme.

The assets include nearly $97 million in cash, checks and bank accounts, homes in Massachusetts and Florida, several high-end automobiles and two boats, according to a federal indictment.

In Central Massachusetts, the properties range from modest rental homes in Worcester to a mansion in Northboro. Authorities also want bank accounts at Commerce Bank and Digital Credit Union forfeited to the government.

If prosecutors succeed in their case against TelexFree co-owners Carlos N. Wanzeler and James M. Merrill, the assets could go toward repaying people who claim to be victims of TelexFree.

"With the cash they accumulate after they sell everything, they can use it to give restitution to the victims, or if there's money left over, they can use it to fund various law enforcement activities," said Peter Elikann, a criminal defense lawyer and vice chairman of the criminal justice section of the Massachusetts Bar Association who is not involved in the case.

The U.S. Attorney's office did not respond to an email seeking comment.

TelexFree was a Marlboro business that sold Internet telephone services. The company sought bankruptcy protection in April while under federal investigation.

Prosecutors say most of the company's revenue came from individuals, many of them immigrants or people overseas, who paid to become "promoters" and were promised payments even if they sold nothing.

TelexFree may owe money to 1 million people, according to filings by the trustee assigned to the company's bankruptcy filing.

Mr. Merrill, a Worcester native, is confined to his Ashland home while awaiting trial on nine charges of wire fraud and conspiracy. He has pleaded not guilty to all charges.

Mr. Wanzeler of Northboro faces the same nine charges but allegedly fled to his native Brazil in April.

In Central Massachusetts, prosecutors are going after several homes owned by Acceris Realty Estate LLC, according to deeds. Mr. Wanzeler's wife Katia is listed in state records as manager of Acceris.

The properties include:

•A 4,126-square-foot home at 373 Howard St., Northboro, that Acceris bought in May 2013 for $950,000, according to a deed and assessor's records.

•A 1,000-square-foot townhouse at 30D Mount Ave., Worcester, that Mr. Wanzeler bought in December 2012 for $118,000 and then transferred to Acceris in May 2013.

•A duplex at 462-464 Coburn Ave., Worcester, that Acceris bought in March 2013 for $241,320.

Silvania Silva, who has lived in one unit of the duplex with her family for a year, said yesterday she rents from Katia Wanzeler but does not interact with her. Ms. Silva's relatives rent the other half of the duplex from Mrs. Wanzeler, who she described as a "good landlord."

In addition, federal authorities are seeking the forfeit of:

•An 1,100-square-foot townhouse at 41A Mount Ave., Worcester, that Mr. Wanzeler bought in 2002 for $150,000, according to a deed. State records list this as the location of Acceris. No one answered the door Friday at the home, where weeds poked up through a brick walkway and unopened mail was piled in a mailbox.

•$421,115 seized from Commerce Bank accounts for Brazilian Help Inc. Mr. Wanzeler is listed in state records as the president of Brazilian Help.

•$129,088 seized from Digital Credit Union of Marlboro from an account for Above & Beyond the Limit LLC. The credit union declined to comment.

Authorities said in the affidavit they also might seek the forfeit of 655 Plantation St., Unit 17B, a 962-square-foot condo bought by Mr. Wanzeler in 2004 for $112,000; 149 Barnard Road, Worcester, a 1,200-square-foot house that Mr. Wanzeler bought in 2012 for $110,000 and later transferred to Acceris; and 59 Pleasant St., Clinton, a 3,700-square-foot, two-family home Mr. Wanzeler bought in 2012 for $130,000 and later transferred to JC Real Estate Management.

One unusual aspect of the TelexFree case is that it is moving forward in three federal court systems: criminal, bankruptcy and civil, where the Securities and Exchange Commission has filed suit against TelexFree. Both criminal and bankruptcy authorities are seeking the company's assets, raising the question of who might handle the task of repaying people who say they gave money to TelexFree.

"If federal law says the U.S. Attorney can seize assets and take priority over the debtor and creditors, then the bankruptcy court and the trustee have to abide by the law," said Kevin McGee, a bankruptcy lawyer with the Worcester firm Seder & Chandler LLP.

Stephen B. Darr, the trustee in the bankruptcy case, said he and the U.S. Attorney's office are cooperating.

"Certainly all the funds I accumulate will be for the administration of the estate, payments to the creditors, and the money that the U.S. Attorney's office attains under the forfeitures I believe will be made available to the victims," he said.

Contact Lisa Eckelbecker at lisa.eckelbecker@telegram.com. Follow her on Twitter @LisaEckelbecker.